Comex gold futures prices are rallying strongly in after-hours U.S. trading Friday afternoon. Bargain-hunting and technically related buying are featured. The active December futures contract has pushed well above what was a solid psychological resistance barrier of $1,800.00, which triggered buy stops and attracted still more trader demand. A lower U.S. dollar index Friday combined with notions the U.S. Federal Reserve will implement some fresh monetary stimulus sooner rather than later also boosted the safe-haven precious yellow metal. With the very strong rebound in gold prices Friday, now recovering over half of this week's sharp losses, the bulls are now becoming more confident that Thursday's low of $1,705.40 in December gold futures will mark a "reaction low" on the daily bar chart, in an uptrend that will now resume. The fact that gold prices were able to rebound strongly and close the week well up from the weekly low is also a bullish technical clue. December gold last traded up $60.80 at $1,824.00 an ounce.
Sources : http://www.kitco.com/reports/KitcoNews20110826JW_upd_1.html
Saturday, August 27, 2011
Friday, August 26, 2011
Gold Bounces Back After Big Plunge
Gold futures for December delivery rose $5.90 to settle at $1,763.20 an ounce.
The modest gains came amid rumors that ratings agencies may look to downgrade Germany's credit rating.
Standard and Poor's, Fitch Ratings and Moody's Investors Services said Thursday that they did not have any updates to their AAA-rating on Germany.
On Wednesday, gold prices plunged $95.80, or 5.1%, to settle at $1,765.50 an ounce. Analysts said it was the biggest one-day drop since 1980.
The selling on Wednesday came after gold prices spiked above $1,900 an ounce earlier in the week. Gold had been on a winning streak since early July, when the metal traded around $1,500 an ounce.
Traders said the recent run-up was driven partly by expectations that the Federal Reserve will hint at new steps to support the economy. Fed chairman Ben Bernanke will speak Friday at the Kansas City Fed's annual retreat in Jackson Hole, Wyo.
Those expectations were called into question Wednesday following a better-than-expected report on durable goods.
In addition, gold prices were pushed lower as investors rushed to close contracts ahead of recently announced increases in margin requirements that went into effect Thursday.
The CME Group, which runs the Chicago Mercantile Exchange, announced a 27% increase in margin requirements on Wednesday. It was the biggest hike in years and came after the Shanghai Gold Exchange announced a similar move earlier in the week.
The hikes are designed to control volatility in the market by limiting the amount of leverage traders can use to maximize bets.
"Anyone that's bought gold in a leveraged play is being forced out as margins go up at the close of business today," said Adam Klopfenstein, a senior commodities market strategist at MF Global.
Klopfenstein said the gold market had become "crowded" as institutional investors, such as pension and sovereign wealth funds, plowed money into short-term positions in gold futures.
"The people buying gold without a long-term perspective are the ones that are dumping right now," he said. "Long-term, the bull case for gold is still there."
Jon Nadler, senior analyst at Kitco Bullion Dealers in Montreal, said the gold market is being driven mainly by psychological factors.
"It's like the waiting room at a psychiatrist's office," he said. "We've seen fear, despair, greed, denial -- mostly denial," he said.
Nadler said prices could fall further if the metal drops below $1,650 an ounce. But he wouldn't rule out a rebound of about $65 an ounce in the near term.
He said some investors are still expecting the Fed to signal additional stimulus measures at a meeting in Wyoming this weekend. Ben Bernanke, the central bank chairman, is scheduled to deliver the keynote speech Friday.
In any event, he said the recent volatility in the gold market is worrying for an asset that is supposed to be a hedge against volatility.
The drop on Wednesday was the biggest one-day price decline since 1980, he said.
"The psychological damage to the small investor is already shaping up in full force," he said. "They might start leaning toward the side that says we had a bubble, and bubbles don't deflate slowly once they're pricked."
Sources : http://www.wdsu.com/money/28975818/detail.html
Thursday, August 25, 2011
PRECIOUS-Gold falls $200 from Tuesday's record high
Investment appetite for gold has cooled ahead of a widely awaited central bankers' meeting at Jackson Hole, Wyoming, as speculation grows over whether or not the Federal Reserve will signal a further round of U.S. monetary easing.
More quantitative easing -- or money printing -- from the Fed could significantly lift gold, but it could have further to correct if no additional action is signalled.
Spot gold was down 1.6 percent at $1,722.50 an ounce at 1351 GMT in volatile trade, having earlier touched a low of $1,702.44.
Investors cashed in on gold's latest rally after the yellow metal surged nearly 20 percent in early August to record highs at $1,911.46 an ounce.
Spot prices fell 4.3 percent on Wednesday, their biggest one-day drop since December 2008, after U.S. durable goods data beat expectations. U.S. gold futures also posted their sharpest slide since 1980.
"Gold seemed to be running ahead of where equity markets were pointing to in terms of downside risks -- those markets were stable and gold kept wanting to push higher and higher," said Macquarie analyst Hayden Atkins. "Once we got an upside surprise in data, we saw some of those longs washed out."
Any recovery from these lows will be dependent on what happens in the next few days. "It's not really clear what the Fed's intentions are," said Atkins. "People are waiting and watching."
Holdings of the world's largest gold-backed exchange-traded fund, the SPDR Gold Trust , declined by more than 27 tonnes on Wednesday, their biggest one-day outflow since Jan. 25. They have dropped nearly 60 tonnes this week, worth around $3.25 billion at today's prices.
Gold's losses were exacerbated late on Wednesday after the CME Group, the world's largest commodities exchange, raised margins on gold futures by about 27 percent, the biggest hike in more than 2-1/2 years and the second increase in a month.
But the metal's overall uptrend, which has seen it climb more than 20 percent this year, is still intact, analysts said.
"To be convinced you'd seen the top of the market you would have to see more signs of the issues that had lifted gold being resolved, such as the euro zone crisis, and U.S. growth coming back," said Mitsubishi analyst Matthew Turner.
Assets seen as cyclical or higher-risk than gold rose on Thursday as gold declined. European shares climbed after a raft of positive corporate results, oil prices firmed and the euro strengthened against the dollar.
EXPECTATIONS SCALED BACK
All eyes are now on Jackson Hole. Fed chief Ben Bernanke's speech on Friday is being closely watched for hints of a fresh round of quantitative easing, which some have speculated could be necessary to kick-start growth.
Bernanke is likely to use his speech to acknowledge disappointment over the pace of the recovery and explain how the Fed will tackle sluggish growth.
"It is fair to say that gold should be one of the bigger beneficiaries of another round of quantitative easing; anticipation of such has been a driver of gold's strength recently given worries about financial stability and a deteriorating economic outlook," said UBS in a note.
"That yesterday's U.S. durable good data release surprised on the upside raised a red flag, along with equities trading again in positive territory, and climbing Treasury yields.
"As expectations of what Fed Chairman Bernanke can say at Jackson Hole tomorrow are scaled back, gold should be one of the assets that reacts most," it added. "But there is also a positive aspect to this, in that gold appears to have already discounted disappointment at Jackson Hole."
Among other precious metals, silver was down 0.1 percent at $39.64 an ounce, spot platinum was up 0.1 percent at $1,804.74 an ounce, and spot palladium rose 0.8 percent to $749.50 an ounce.
Sources : http://www.reuters.com/article/2011/08/25/markets-precious-idUSL5E7JP17J20110825
Warren Buffett to invest $5 billion in Bank of America
Bank of America shares rose 12.3 percent to $7.85, erasing some part of the stock's August losses. The jump also makes the warrants for Bank of America shares that Buffett gets in the deal instantly profitable.
Buffett and Bank of America said he made an unsolicited call to the bank on Wednesday morning, offering to make an investment. Even though the bank has said it did not need to raise capital, investors widely believed Bank of America needed more money and to show it could raise funds easily.
Bank of America has been plagued by fears that bad mortgage loans and legal liabilities from loans packaged into bonds by its Countrywide unit could drag it into tens of billions of dollars in fresh losses that would stretch its capital.
The deal proved again that Buffett has become something of a lender of last resort to the financial system, as he did with Goldman and also GE. Buffett's role in aiding the economy and the financial system has become symbolically important given the lack of policy options left for the U.S. government and the Federal Reserve to stimulate demand.
"This proves to the market that if the bank needs additional capital, which we don't believe they do, but if they needed to calm the market by raising capital, they could do it within 30 minutes with a quick call to Uncle Warren," said Sean Egan, managing principal of Egan-Jones Ratings.
INSTANT RETURN
Buffett's Omaha-based Berkshire Hathaway could make out even better financially than Bank of America did in the deal. Berkshire had a position that he sold in the fourth quarter of 2010 when the stock had an average price of $12.24.
The warrants to buy 700 million shares of common stock he gets in this deal are priced at just over $7.14 per share, with an unusually long 10-year exercise period. One Berkshire holder said the warrants were the best part of the deal by far.
"He could well make a 100 percent return on his investment in a few years," said James Armstrong, president of Henry H. Armstrong Associates. "It's amazing how much a little hug from Buffett is worth these days."
Bank of America will also sell Berkshire 50,000 shares of cumulative perpetual preferred stock with a 6 percent annual dividend, it said. Bank of America can buy back the investment at any time by paying Buffett a 5 percent premium.
It is virtually a mirror of the deal Berkshire did with Goldman in the depths of the crisis in fall 2008, except in Goldman's case it paid a 10 percent dividend. The Goldman deal paid Berkshire $15 a second in dividends until Goldman bought Buffett out earlier this year.
"It's a reasonably priced deal for Buffett. It's opportunistic," said Tom Russo, a portfolio manager at Gardner, Russo & Gardner who holds Berkshire shares.
Buffett told CNBC he had never spoken to Bank of America CEO Brian Moynihan before Wednesday, and that he dreamed up the idea while taking a bath.
BANK'S WOES
Earlier this month, a $10 billion lawsuit over soured mortgage securities by AIG helped spur fears about Charlotte-based Bank of America's liabilities, as well as questions around how it would pay for more losses.
In recent weeks, investors have sold shares, worrying that the bank might need more capital -- as much as $50 billion by some estimates -- to cope with losses and meet capital rules.
For shareholders who have watched the bank take two government bailouts and also seen the government step in earlier this year to block a planned dividend raise, further dilution would have been a bitter pill to swallow.
Moynihan said on an August 10 conference call the bank could add to its capital through earnings and asset sales. The call, organized by Fairholme Funds, one of the bank's largest investors, came two days after shares plunged by 20 percent.
But many were not convinced. On Tuesday, blogger Henry Blodget said the bank could face $100 billion to $200 billion in write-offs and balance sheet issues, a claim the bank denied, but one which pushed shares to early 2009 lows.
"This helps with the credibility gap that I think has existed in the minds of some shareholders. It reiterates the point that the balance sheet is healthy. They needed an endorsement in the market and they got it," said Jon Finger, managing partner of Finger Interests in Houston. Finger's family sold its bank to Bank of America years ago.
Moynihan has said the bank is targeting a 6.75 to 7 percent tier 1 common capital ratio by the end of 2013 under the new Basel III rules. Currently, the bank has $400 billion in total excess liquidity, and the company could meet all of its unsecured debt obligations within 22 months.
The cost of insuring Bank of America debt against default has also been rising, but contracted on Thursday after the Buffett deal, narrowing 68 basis points to 305 basis points. That means it would cost $305,000 a year for five years to insure $10 million in debt.
Sources : http://www.reuters.com/article/2011/08/25/us-bankofamerica-idUSTRE77N4J420110825
Wednesday, August 24, 2011
Comex Gold Lower on Follow-Through Pressure from Big Losses Tuesday
Comex December gold futures prices are trading lower Wednesday morning on more profit-taking pressure after the market absorbed heavy losses on Tuesday. The market place early Wednesday is leaning toward the "risk off" investor mentality, which is helping to limit the downside in gold. Importantly, no significant technical damage has been inflicted in gold and the sizeable downside price correction was not unexpected. December gold last traded down $15.80 at $1,845.50 an ounce. Spot gold last traded up $13.20 an ounce at $1,843.00. December Comex silver last traded down $0.345 at $41.985 an ounce.
Gold traders decided to book some profits after prices Tuesday pushed to a fresh all-time record high of $1,917.90 an ounce. During the month of August, gold prices had appreciated by around $300.00, so a corrective pullback was due. Gold prices could continue to correct lower the rest of this week. However, if recent history continues to play out, investors and traders will "buy the dip" in prices, reckoning they are getting a bargain buy.
This week's Federal Reserve symposium in Jackson Hole, Wyoming is attracting trader and investor attention. It was at last year's event in Jackson Hole that Fed Chairman Ben Bernanke unveiled a fresh U.S. economic stimulus package. Given the recent spate of weak U.S. economic data, some reckon the Fed will announce another monetary stimulus effort at this year's meeting (QE3). Bernanke is scheduled to give a speech in Jackson Hole on Friday. However, there is no clear consensus regarding whether Bernanke will spell out a fresh stimulus plan on Friday. Still, most commodity markets are being supported and the U.S. dollar index pressured this week by trader notions there will be some fresh U.S. monetary policy stimulus coming at some point, and sooner rather than later.
Anticipation regarding the Bernanke Jackson Hole speech Friday has temporarily pushed to the back burner the European Union debt crisis. But the ongoing EU debt crisis remains gold market bullish. Greek bond yields have hit record highs this week. There is a growing notion among economists and analysts that the European Union cannot, in its current form, survive the debt crisis. The EU debt crisis will remain an underlying bullish factor for gold.
The U.S. dollar index is trading weaker Wednesday morning and is trading near its recent lows. The greenback bears have the strong overall near-term technical advantage. That's also bullish for the precious metals.
Crude oil prices are trading near steady Wednesday morning. The crude oil bulls this week have regained a bit of upside technical momentum. The crude oil market will continue to be a major "outside market" force for the precious metals.
U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, durable goods orders, the housing price index and the weekly DOE energy stocks report.
The London A.M. gold fixing was $1,850.00 versus the previous P.M. fixing of $1,876.00.
Technically, December gold futures prices Tuesday scored a big and bearish "outside day" down on the daily bar chart, whereby the daily high was higher and low was lower than the previous day's trading range. If there is good follow-through selling pressure and a lower close on Wednesday, then a bearish "key reversal" down would be confirmed, which classic technical analysis suggests would be one early technical clue that a market top is in place. However, twice already this month bearish key reversals have occurred on the daily bar chart and gold prices went on to score new highs. Thus, one cannot put a lot of stock in a key reversal suggesting a top is in place in this market. Gold bulls still have the solid overall near-term and longer-term technical advantage. There have been big daily moves on the upside recently, and some big daily downside corrections are not surprising. Prices are still in a 6.5-month-old uptrend on the daily bar chart and in a 10-year-old uptrend on the monthly chart. Bulls' next near-term upside technical objective is to produce a close above solid technical resistance at Tuesday's record high of $1,917.90. Bears' next near-term downside price objective is closing prices below solid technical support at $1,817.60. First resistance is seen at the overnight high of $1,856.80 and then at $1,881.40. First support is seen at Tuesday's low of $1,826.00 and then at $1,817.60.
December silver futures prices Tuesday hit a 3.5-month high early on, but then price action also scored a bearish "outside day" down on the daily bar chart. The silver bulls still have the overall technical advantage. Bulls' next upside price objective is producing a close above strong technical resistance at $45.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at $40.00. First resistance is seen at the overnight high of $42.51 and then at $43.00. Next support is seen at Tuesday's low of $41.565 and then at $41.00.
Sources: http://www.kitco.com/reports/KitcoNews20110824JW_am.html
Tuesday, August 23, 2011
Comex Gold Soars to Another New Record-High on Continued Strong Safe-Haven Investment Demand
Fresh civil unrest in Libya has temporarily joined the European Union debt crisis as a major market factor. Rebels have taken control of the Libyan capital of Tripoli, with many believing Libyan leader Gadhaffi is on the verge of being overthrown. The uncertainty regarding the Libyan situation and the ongoing EU debt crisis are gold market bullish. There were no major weekend developments on the EU debt crisis front, but traders are keeping a keen eye out for any fresh EU news, and on how the EU financial markets are acting. Some key economic data coming out of Germany on Tuesday and Wednesday will be the next major pieces of the EU debt equation that traders will closely evaluate. Don't be surprised to see the European financial markets once again go from a simmer to a boil in the coming days.
This week's Federal Reserve symposium in Jackson Hole, Wyoming will attract keen trader and investor attention. It was at last year's event in Jackson Hole that Fed Chairman Ben Bernanke unveiled a fresh U.S. economic stimulus package. Given the recent spate of weak U.S. economic data, many wonder if the Fed will announce another monetary stimulus effort at this year's meeting (QE3). Bernanke is scheduled to give a speech in Jackson Hole on Friday. Speculation among traders and investors about further Fed easing of monetary policy is a mildly bullish development for the precious metals. However, most market watchers do not think the Fed will take significant action on monetary policy during Bernanke's speech Friday.
The market place continues to look to the U.S. stock market and its daily movements. The daily price moves in the U.S. stock indexes continue to be the gauge for measuring investor risk appetite in the market place.
The U.S. dollar index traded narrowly mixed Monday. The greenback bulls have faded recently and the bears have the overall near-term technical advantage. That's also bullish for the precious metals.
Crude oil prices are trading higher Monday on short covering following strong losses late last week. Price late last week hint that crude oil futures prices may retest the August low. The crude oil market will continue to be a major "outside market" force for the precious metals.
The London P.M. gold fixing was $1,877.50 versus the previous P.M. fixing of $1,848.00.
Technically, December gold futures prices closed nearer the session high Monday. Gold bulls have the strong overall near-term and longer-term technical advantage. There are no early technical clues to suggest a market top is close at hand, even though this is a mature bull market run that has gone parabolic. There have been big daily moves on the upside recently, but traders now need to expect bigger downside price corrections coming up, in the overall uptrend. Gold prices are in a 6.5-month-old uptrend on the daily bar chart and in a 10-year-old uptrend on the monthly chart. Bulls' next near-term upside technical objective is to produce a close above major psychological resistance at $2,000.00. Bears' next near-term downside price objective is closing prices below solid technical support at $1,817.60. First resistance is seen at Monday's all-time high of $1,898.60 and then at $1,925.00. First support is seen at Monday's low of $1,858.00 and then at Friday's low of $1,824.50. Wyckoff's Market Rating: 10.0.
December silver futures prices closed nearer the session high and scored a fresh 3.5-month high Monday. Silver was supported on spillover buying from the gold market. Silver bulls have gained solid upside near-term technical momentum recently. The silver bulls have the solid overall technical advantage, too. Bulls' next upside price objective is producing a close above strong technical resistance at $45.00 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at $40.00. First resistance is seen at Monday's high of $44.10 and then at $44.50. Next support is seen at $43.00 and then at Monday's low of $42.57. Wyckoff's Market Rating: 7.5.
December N.Y. copper closed down 370 points 396.35 cents Monday. Prices closed nearer the session low. A big bearish pennant pattern is still in place on the daily bar chart. Copper bears have the overall near-term technical advantage. Copper bulls' next upside breakout objective is pushing and closing prices above solid technical resistance at 410.00 cents. The next downside price breakout objective for the bears is closing prices below solid technical support at the August low of 384.20 cents. First resistance is seen at 400.00 cents and then at Monday's high of 403.35 cents. First support is seen at last week's low of 394.50 cents and then at 392.50 cents.
Sources : http://www.kitco.com/reports/KitcoNews20110822JW_pm.html
Monday, August 22, 2011
Record Gold Prices
Emas dapat mencapai $2,000 per ounce pada akhir tahun ini karena pembelian bank sentral dan alasan ekonomi meningkatkan daya tarik logam mulia adalah sebagai sebuah perlindungan, kata Kothari.
“Emas akan naik menjadi $2,000 atau lebih pada akhir tahun 2011 jika ekonomi global tetap sama,” katanya. “Bank-bank sentral juga membeli emas, yang mana ini adalah hal positif.”
Sunday, August 21, 2011
Gold a 'bubble that could deflate,' says analyst
Record gold prices may be heading for a correction of about 8 percent next month, but the safe-haven metal may also rally to $2,400 an ounce next year as investors seek refuge amid global economic turmoil, a global head at INTL FCStone on Saturday.
"Trees don't grow till heaven. I think buyers need to be beware. we are in a 'caveat emptor' market," said Jeffrey Rhodes, global head of precious metals at the brokerage and an industry expert, told reporters at a conference on gold in the southern Indian state of Kerala.
International gold struck a record of $1,877 an ounce on Friday, still on track for its biggest one-month rise in nearly 12 years in August and its biggest one-week gain since early 2009.
Rhodes said gold may retrace to $1,725 by next month, and then race ahead.
"My problem is that people are buying gold and they don't understand why they are buying gold and that's a big problem and that is a classic symptom of a bubble," said Rhodes.
Rhodes said there is an absence of "real motivation" for investors to cash in their gold holdings to cover losses from the equity markets.
On Friday, global equity markets slid anew and gold set a second-straight record high as fears of a possible U.S. slide into recession and concerns related to Europe's debt crisis kept investors on edge.
Sources : http://af.reuters.com/article/metalsNews/idAFL4E7JK02L20110820?sp=true
Gold Seen Rising Next Week If Financial Worries Persist
Gold prices set an all-time nominal high on Friday of $1,881.40 an ounce on the Comex division of the New York Mercantile Exchange as worries about European banks and dismal economic data in the U.S. catapulted prices upward.
The most-active December contract settled at $1,852.20, up 6.3% on the week. December silver settled at $42.467, up 8.5% on the week.
In the Kitco News Gold Survey, out of 34 participants, 21 responded this week. Of those 21 participants, 19 see prices up, while two see prices down, and none see prices sideways or unchanged. Market participants include bullion dealers, investment banks, futures traders and technical chart analysts.
Gold’s short move above $1,880 has pushed prices to a new all-time high in real U.S. consumer price index-adjusted terms, noted Deutsche Bank analyst Michael Lewis.
Other inflation-adjusted measuring methods, such as the calculator used by the Minneapolis Federal Reserve Bank, put gold’s inflation-adjusted high around $2,400.
Charles Nedoss, senior market strategist with Olympus Futures, said despite the furious rally in gold, he believes there is enough momentum and uncertainty in the global markets to continue to support prices.
Technical chart resistance, he said, is at the round number of $1,900, which is not far from where gold tagged an all-time nominal high. Support comes in at $1,800 and then $1,774, but he added that gold prices could fall as far as $1,704, which is the 20-day moving average, without breaking the recent trend.
The situation in Europe will likely guide market direction again next week. After a slew of disappointing U.S. data this week, “focus will be very much on whether incoming eurozone data will paint a similarly dismal picture,” said BNP Paribas. After German gross domestic product data was lower than expected there is little hope of other regions posting better-than-expected numbers.
Marc Chandler, global head of currency strategy at Brown Brothers Harriman, said next week the International Monetary Fund, the European Union and the European Central Bank will visit Greece to evaluate the progress toward meeting the conditions to allow the next tranche of the 2010 aid program.
“As we saw previously, this poses event risk as the weaker growth performance (and projected) makes the fiscal targets more difficult to achieve. In a larger sense, the dispute over Greek collateral points to a still laborious process approval of the second Greek aid package,” he said.
Austin Kiddle, analyst at London-based firm Sharps Pixley, said with the economic woes seeming to carry on for the foreseeable future, the outlook for gold as a safe haven is strong.
But he said there is some concern about a potential gold market bubble, which would be “dangerous territory” for a safe haven.
“Gold’s major strength in the last 5,000 years has been its stability, its ability to store wealth in times of hardship and to protect your saving from becoming worthless. At this point, in time we can see that gold is reacting to a perfect storm of factors in the shape of high demand from China and India, a weakening U.S. Dollar, mine supply decreasing year on year, sovereign debt crisis in Europe and an increase in worry in the market as a whole,” he said.
For now there’s enough interest in gold to keep prices support, but Kiddle said, “unless there is a new major crisis popping up anytime soon, we feel that gold is currently over-brought and should see a small correction. However, as with most perfect storms there is always an air of uncertainty that underlies most systems, and a single factor such as more countries following Venezuela's lead or yet more debt downgrades, could easily push gold closer to US$2,000 this year.”
There has been some market chatter that gold prices are going parabolic and Nedoss said that’s not entirely inaccurate. “It kind of has been, but we have had some days of relief,” he said, emphasizing some recent pull backs.
Gold’s rapid rise has some traders wondering if the market is looking to touch $2,000, only to reverse once the milestone hits. While that may be true, the worries over the E.U. banking system and general financial gloom means that people are concerned which gives gold legs.
“Gold is a vehicle and people are flocking to it because of fear. It is a store of value and it is a currency,” Nedoss said.
Despite the rise in prices, Ken Morrison, editor and founder of online newsletter, Morrison on the Markets, pointed out that holdings in the world’s largest exchange-traded fund, the SPDR Gold Trust (GLD), remain under the highest level of 1,320 metric tons set on June 30, 2010.
“Since Aug. 1 when ownership was 1264 tons, the GLD ownership has ranged from 1310 on Aug. 8 to a low of 1260 on Aug. 15, and now back at 1288 as of Thursday's close ..... If GLD is the proxy for the average investor’s appetite for gold, this is not providing strong evidence about the presumed ‘rush’ to own gold at least for the retail investors or the money managers without futures accounts,” Morrison said.
Looking at other precious metals markets, Nedoss said, silver is playing a bit of catch up with gold. “The rally took a while to get going,” he said, but the move above the 20-day moving average is a positive sign. The close above $42.31 is very positive for silver.
For the platinum metals group, market watchers said labor negotiations will continue to influence the direction of metals. A platinum trader said as long as tensions between mineworkers and mine owners persist, it will put a floor under prices. The trader noted talks are being held between workers at Impala Platinum and Anglo Platinum.
Despite the potential impact any labor unrest may cause, Deutsche Bank’s Lewis said ongoing weakness in the U.S. labor market will hamper PGM demand, particularly for palladium. “We find that the labor market remains a key driver for U.S. auto sales. Since the lion’s share of platinum and palladium demand is in the use of auto-catalysts, and with North America constituting almost 30% of global demand for palladium and less than 20% for platinum it would suggest the PGM complex and specifically palladium could under-perform in an environment where the US labor market remains weak,” Lewis said.
Sources : http://www.kitco.com/reports/KitcoNews20110819DeC_outlook.html
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